I've heard people say that SACD ought to fail in transient reproduction, (because it can only encode a rise and fall relative to the last time step) so I did some calculations:

'Sampling rate' of SACD = 2.8MHz = 64x 44.1kHz

For encoding tones up to 44.1kHz at full scale, it has to reach full-scale from 0 in 64 steps, that is, at any given time there can only be 64 possible positions for the waveform.

This gives it 6 bits resolution to CD's 16 bits??

OK, suppose you only need to encode up to 22.05kHz at full scale, the number of possible positions increases from 64 to 128--7 bits resolution, big improvement

I doubt this is how DSD actually works, but this article http://www.iar-80.com/page40.html (I linked to page 40, but it seems page 1-39 may be going on and on about the sonic flaws of DSD as well) seems to take this view seriously and goes on to talk about how you try to recover musical information from the 6 bit stream.